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February 25, 2016 | Grain Hedge Insights | Kevin McNew | Views: 395

Gains Going into the Break This Morning

Outside Markets were Relatively Subdued

Gains Going into the Break This Morning

Grains posted modest gains going into Thursday’s break, while outside markets were relatively subdued in quite, two-sided trading.

 

In wheat news, Egypt announced another tender yesterday for shipment Mar 26-Apr 4. Also, Saudi Arabia announced a large tender for 770,000 MT of hard wheat. India is also expected to be entering the market soon as weather issues there have cut back on supplies.

 

This morning, USDA’s Ag Outlook Forum provided the first look at 2016 USDA acreage projections. Although not based on formal surveys, it provides a basis for the markets prior to the first official survey released at the end of March.  USDA’s chief economist pegged corn plantings up 2 million in 2016 to reach 90.0 million. Trade expectations were for a 1.5 million acre increase. For soybeans, USDA expects a 0.2 million acre drop in 2016 versus the trade looking for a 0.6 million acre increase. Wheat acres are expected to drop 3.6 million versus only a 2.2 million acre drop expected by analysts.

 

Crude oil got a lift on Wednesday as EIA inventory data was in line with analyst expectations. The report showed a bump in crude stocks on the week by 3.5 million barrels, versus trade expectations of a 3.4 million barrel increase. Crude managed to rally over a $1.50 a barrel on that news, but has been on the defensive since then.  However, at 507.6 million barrels, the latest increase pushed total domestic crude inventory to another weekly high and 74 million barrels higher compared with last year. In monthly data, which doesn’t line up exactly with weekly data, inventories last exceeded 500 million barrels in 1930.

 

WEEKLY EXPORT SALES

                                Actual (OC+NC)      Expected (OC+NC)

Corn                              1,066                     700-1,200

Soybeans                        328.6                      300-700

Wheat                            486.2                      200-400

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)

February 24, 2016 | Grain Hedge Insights | Kevin McNew | Views: 614
February 24, 2016 | Grain Hedge Insights | Kevin McNew | Views: 376

Grains Continue their Weakness from Tuesday

Outside markets were also weaker for the S&P and crude oil

Grains Continue their Weakness from Tuesday

Grains continued their weakness from Tuesday by starting Wednesday in negative territory. Outside markets were also weaker for the S&P and crude oil.

 

Yesterday saw wheat futures carve out new contract lows and hit their lowest price for nearby futures in 5 years. Rains crossing Oklahoma and eastern Texas brought beneficial moisture to the southern U.S. Plains winter wheat belt. Also, continued pressure from huge global supplies and weak US export demand continue to weigh heavily on the wheat market.

 

Traders will turn their attention to Thursday’s USDA Ag Outlook Forum. Average analyst estimates are for USDA to pencil in higher corn and soybean acres in to their outlook for 2016. Analysts expect an average corn number of 89.648 mln versus 88.0 in 2015. For soybeans, 83.302 mln versus 82.7 on 2015 and wheat at 52.4 mln versus 2015 acres of 54.6.

 

Crude oil fell sharply on Tuesday with continued losses to start the trade day today. Saudi’s oil minister spoke at a conference in Houston, suggesting no end to the pain for the oil industry and giving no inclination of cutting back on production. Late Tuesday, the American Petroleum Institute, an industry group, said that U.S. stockpiles increased by more-than-expected 7.1-million-barrel last week. The Energy Information Administration will release its official data later on Wednesday and analysts polled by The Wall Street Journal expect an increase of 2.4 million barrels.

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)

February 23, 2016 | Grain Hedge Insights | Kevin McNew | Views: 733
February 23, 2016 | Grain Hedge Insights | Kevin McNew | Views: 314

Grains were Lower in the Overnight

In outside markets, S&P futures were modestly lower as was crude oil.

Grains were Lower in the Overnight

Grains were lower overnight giving up most of Monday’s gains. In outside markets, S&P futures were modestly lower as was crude oil.

 

Grains got a bit of a lift on Monday as USDA’s weekly export inspections report showed corn and soybean exports for the week above analyst expectation. This pushed grain prices to their highest point in two weeks but they quickly backed off as abundant global supplies continue to pressure prices.

 

In overnight news, there was fresh export activity. A South Korea firm bought 67,100 MT of US milling wheat while the Philippines and Thailand had tenders out for feed wheat. Saudi Arabia said it would be tendering soon for wheat, marking their first foray into the wheat market this year. Also, South Africa announced they would relax some of their tough rules on GM crops so it can ramp up corn imports from the US and Mexico to avert a food crisis.

 

Ukraine's grain harvest is likely to fall 10 percent to 52.2 MMT in 2016 due to a sharp decrease in winter wheat output caused by poor weather during the sowing, analyst UkrAgroConsult said on Tuesday. The wheat harvest is likely to decrease to 17.3 MMT this year from 24.8 MMT in 2015, the consultancy said in a statement.

 

Oil markets settled up as much as 6 percent on Monday as speculation about falling U.S. shale output and a rally in equities fed the notion that crude prices may be bottoming after a 20-month collapse. Prices began the week with a rebound in Asian trade, reacting to Friday's U.S. rig count data. The number of oil drilling rigs in operation fell to a December 2009 low after nine straight weeks of cuts. Oil got a further boost after the International Energy Agency, the world's oil consumer body, said U.S. shale oil production could fall by 600,000 barrels per day (bpd) this year and another 200,000 bpd in 2017. However, a Reuters poll forecast that U.S. crude inventories rose 3.2 million barrels last week to record highs above 504 million barrels. EIA will release their latest inventory data Wednesday morning.

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)

February 19, 2016 | Grain Hedge Insights | Kevin McNew | Views: 376

Weekly Cash Comments

Weekly Cash Commentary for week ending 02/19/2016

Weekly Cash Comments

Grain basis levels continue to be mostly flat across the US with corn inching higher by 1-cent a bushel while soybeans was unchanged for the week.

 

In soybeans, there was little movement overall as soy plants and river terminals as a group held steady on the week. Slowing export demand along with a wind down in the season for soybean exports is keeping basis levels flat.

 

For corn, export business is beginning to pick up as a weaker US dollar in the past two weeks has improved the competitive position of corn in the world market.  River terminals bid up corn basis by nearly 2 cents a bushel although the Gulf basis slumped by about 1 cent a bushel.

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)

February 19, 2016 | Grain Hedge Insights | Kevin McNew | Views: 308

Grains Weak Overnight

S&P futures and crude oil slid lower while the US dollar added to its string of recent gains

Grains were slightly weaker overnight with limited trade activity. In outside markets, S&P futures and crude oil slid lower while the US dollar added to its string of recent gains.

 

Russian Deputy Prime Minister, Arkady Dvorkovich, said on Friday that the government has not yet made any decision on whether to change the wheat grain export duty, the TASS news agency reported.  Russia's Agriculture Ministry said earlier this month it would like to keep the wheat export duty as a means of regulating the market but would like to see it close to zero or at zero, the Interfax news agency cited the ministry's First Deputy Minister Yevgeny Gromyko as saying.

 

In South America, a significant thunderstorm complex overnight brought locally heavy rain to parts of central Cordoba, central/southern Santa Fe, Entre Rios, and northern Buenos Aires. A more limited rain pattern otherwise remains anticipated for the balance of the 15-day period to keep any concerns with excessive rainfall isolated. The moisture is otherwise very timely to support high corn/soy yield potential and will prevent any stress with a brief warming (low to mid 90s in the hottest areas) early next week.

 

In crude oil, a record build in U.S. crude inventories last week stoked concerns over persistent global oversupply. Crude stocks rose by 2.1 million barrels to a peak of 504.1 million, data from the U.S. government's Energy Information Administration (EIA) showed on Thursday. Iraq's oil minister Adel Abdul Mahdi said on Thursday talks would continue between OPEC and non-OPEC members to find ways to restore "normal" oil prices after a meeting in Tehran on Wednesday.

 

WEEKLY EXPORT SALES

 

                         ACTUAL        EXPECTED

Corn                  1,297.9         600-1,000

Soybeans              595.7            400-700

Wheat                  307.9            200-400

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)

February 18, 2016 | Grain Hedge Insights | Kevin McNew | Views: 592
February 18, 2016 | Grain Hedge Insights | Kevin McNew | Views: 254

Grains Start the Day on a Weak Tone

S&P futures moved closer to critical resistance at 1940 while crude oil and the US dollar index continued to trend higher

Grains started the day on a weaker tone following two days of solid gains. In outside markets, S&P futures moved closer to critical resistance at 1940 while crude oil and the US dollar index continued to trend higher.

Argentina has seen excellent rain coverage this week and soil conditions are still rated favorably for yield potential. Follow up rain in the next couple of weeks intermixed with warmer than usual temperatures and brief periods of drying will maintain a nearly ideal environment for high yielding crops.

Fertilizer company, CF Industries, said they expect US corn plantings to move higher in 2016 by 2.5 million acres with their projection for corn acres at 90.5 million.

Consultancy Strategie Grains on Thursday increased sharply its forecast for European Union soft wheat exports in 2016/17, underlining an expected recovery in exports that it sees bringing down EU stocks next season In a monthly report, Strategie Grains put EU soft wheat shipments in 2016/17 at 30.6 MMT, up 1.7 from its previous estimate and 2.3 above the 28.3 MMT of exports it forecast for this season. The firm cited expectations of lower supply next season in the Black Sea exporting region, as well as less competition expected from other exporting countries around the world except for the United States.

Crude inventories fell by 3.3 million barrels in the week to Feb. 12 to 499.1 million, compared with analysts' expectations for an increase of 3.9 million barrels according to industry source API. Official government data from EIA will be released today with a poll of analysts suggesting a gain of 3.9 million barrels in crude oil stocks last week. In political news, an Iranian official earlier said the fourth largest producer in OPEC would continue increasing its output until it reached levels achieved before the 2012 trade sanctions. The pact to freeze output will make little difference to this year's overall supply-demand balance in oil, according to some analysts.

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)

 

February 17, 2016 | Grain Hedge Insights | Kevin McNew | Views: 581

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